"We'd work in hostile surroundings all day, and seek fun and relaxation at night. For music, only the Ritz was open late. Their black quota was three. We required a tie and jacket for admission but, once inside, we couldn't even dance. The music was news to us – it was for ballroom dancing!" recalls former busman George Burton as he explains how he and four work colleagues set up a pioneering Manchester nightclub in the late 1960s for West Indian immigrants.

For 16 years, young and old from the Caribbean community headed to the PSV [public service vehicle] club to celebrate their christenings, weddings and funerals, and, above all, dance through the night as if back "home".

To capture the social history of this era, writing development agency Commonword has launched Ghosts, a Heritage Lottery-funded project, training eight volunteers to archive "living" memories of Moss Side, Hulme and their clubs, from the 1950s until their compulsory purchase in the late 1980s.

Commonword's chief executive, Peter Kalu, feared the clubs might be wrongly labelled as centres of iniquity. Instead, they were consistently praised by those who can still remember – and their adult children.

"We're not after recreating a positivity that wasn't there," says Kalu. "But these places, despite their reputations, played a cohesive communal role. Ghosts is about educating people today with the legacy of the past."

The Nile Club's former owner, Sonny, died in January so pressure is on to collate first-hand evidence by Ghosts' August deadline. Persian, Reno's full-time DJ, entertained regulars including Coronation Street actors, snooker champion Alex Higgins, and pop singer Mick Hucknall, plus visiting stars the Four Tops and Desmond Dekker.

For white pub singer George Kirwin, the clubs were a sociological education. In the 1920s African seamen had settled in Irish Moss Side. The communities did not mix.

Kirwin says: "Our racist taunts came from ignorance. We'd only seen black people like Paul Robeson in films. Stupidly, we felt superior to the West Indians we worked with. The moment we entered their clubs and met people on their own ground, that prejudice vanished."

The brainchild of project co-ordinator and historian Yvonne McCalla, Ghosts will be followed by a 2012 exhibition at Manchester's People's History Museum, and it is hoped it will inspire dance, drama, poetry, music performances, and a book of memoirs. "Most significantly," says McCalla, "it will preserve and record Moss Side and Hulme's positive heritage, which has been overshadowed by today's gangland culture."